Europe's EMV Liability Shift Is Not Yet Absolute
Fecha Viernes, marzo 25 @ 09:29:56
Tema Pago Electrónico :: e-Payment
| Mar 24 2005 : On January 1 2005, liability for card fraud in Europe shifted to the non-chip compliant party in a transaction (the retailer or card issuer), which leaves retailers open to the risk of fraud for the first time
Essentially, merchants who have not adapted their POS infrastructure to accept EMV chip cards will need to cover the cost of any card fraud resulting from the use of an international Visa or MasterCard card on their systems. Fraud liability on domestic transactions in the UK shifted at the start of 2005, although other European countries will be slower to phase in the liability shift.
Given that the UK is unlikely to be fully chip and PIN-compliant until end-2005, merchants who do not strictly enforce PIN use for card transactions will delay the liability shift deadline by at least a year, according to Cards International. Spain will not enforce its liability shift for domestic card transactions until 2008, while Germany had not planned a domestic liability shift for fraudulent transactions, but may need to do so in light of growing fraud. France, which is EMV-enabling an earlier chip card program, meantime expects to be almost fully EMV-compliant by end-2005.
The UK is due to eliminate signature-based card transactions by end-2005 but given that not all cards are yet chip-based, signature-based cards are likely to be used beyond this date. The EMV liability shift caused initial confusion in that retailers believed all signature-based transactions would be banned, but the shift actually means compliant retailers can accept signature-based transactions and the issuing bank will pick up any fraud losses. PIN use will however have to be strictly enforced to ensure the UK’s EMV deployment achieves the 80 per cent fraud reduction of other countries.
Related Spain in the Europe of the EMV
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